The Federal Trade Commission accused another supplement company of hoodwinking consumers with manipulative marketing. Who will probably win this compliance showdown? Advantage: the FTC. Why? Let’s review the situation.
The Manipulative Marketing Accusation: Hacked E-mails Used To Trick Consumers
According to the FTC, the defendants hacked into e-mail accounts, from which they sent promotional messages. The scheme worked beautifully because the email recipients thought friends and family were freely endorsing the weight loss supplement. And let’s face it, word-of-mouth recommendations rival compound interest in terms of greatness.
Fake News Sites Caused Compliance Problem
The phony messages included links to fake news sites featuring paid testimonials and unsubstantiated claims. What constitutes an “unsubstantiated claim”? Saying things like, “You can lose 40 pounds in 40 days without exercise!” will typically attract negative attention from the FTC.
Don’t Use Celebrities’ Names Without Permission
The email marketers also used Oprah Winfrey’s name in promotional materials, implying that the media mogul endorsed one of the product’s active ingredient.
“But if Oprah has talked about the benefits of a given ingredient, how come I can’t highlight that fact in my marketing materials?”
Yes, it’s tempting to leverage a famous name, but it’s unwise to do so, without express permission. Celebrities guard their brands with Minotaurian enthusiasm. If you’d rather not be sued into submission, avoid unauthorized endorsements like gremlins avoid sunshine.
Possible Outcomes Of This FTC Compliance Investigation
The defendants in this case have two options:
- Settle: A lot of businesses don’t want to bother with protracted FTC battles, so they settle. What are the benefits of settling? Cards played right can mean walking away with a small fine and formal warning. A lawyer can help.
- Contest: The Federal Trade Commission doesn’t always win. People have contested investigations and emerged victorious. If you believe you’ve stayed on the right side of regulations, and want to fight back against an FTC accusation, work with a marketing compliance lawyer.
Consult With A Dietary Supplement Lawyer
Aaron Kelly is a down-to-earth attorney who’s worked with hundreds of online sellers and affiliate marketers accused of manipulative marketing. He knows the supplement niche like Don Cherry knows hockey.